The unemployment rate in the United States has hit a 26-year high after another half a million jobs were lost last month.

The labor department said the jobless rate jumped to 8.9% in April from 8.5% the previous month, marking the highest level since September 1983. US employers cut 539,000 jobs in April, the smallest number since October.

The figure was better than the 590,000 decline expected by economists, spurring hopes that the worst might be over. "It's all going to add to the conviction that the economy is approaching bottom," said Pierre Ellis of Decision Economics in New York.

Employment in the private sector fell by 611,000 but this was tempered by a 72,000 jump in government positions.

There were bigger job losses over the previous two months than originally estimated. The March non-farm payrolls figure was revised to show a decline of 699,000 from 663,00, and February now shows a drop of 681,000 compared with a previously reported fall of 651,000.

Jay Mueller of Wells Capital Management in Milwaukee, Wisconsin, said: "It's a terrible number but an improvement relative to the very terrible numbers we had before. The big question is has the peak in job losses hit? I am somewhat skeptical that we have seen the absolute worst of it, but you can't rule that out. By the time we get through with this, I think the unemployment rate will be close to 10%. The government hired a lot of people."

A total of 5.7 million jobs have now been lost since the start of the recession in December 2007.

Others were more hopeful that the economy could be on the mend soon.

"The labour market may have seen its worst months for job cuts. It will be a low healing process, but improvement is expected to come by mid-year," said Chris Rupkey of Bank of Tokyo/Mitsubishi in New York. "The economy doesn't turn on a dime but it does look as if the pace of job losses is starting to slow from the turn of the year. You can make the case that the panic layoffs that we saw at the turn of the year are starting to ease."

There were job losses across nearly all sectors last month, although at a slower rate than previously. The manufacturing sector lost 149,000 jobs while construction cut 110,000 and the service industries slashed 269,000 positions.